James Wilson is a Member of the Mullaperiyar Special Cell, Government of Kerala, India. Who is a civil engineer by profession has presented an extremely detailed and meticulous calculations and inferences on the Demonetization of Indian Currencies.

Just go through the full article brought here , for the knowledge of the subject is best expressed through a clear and concise presentation by Mr. James Wilson.

A monumental disaster in offing!

Currency in Circulation

High denomination notes of ₹500 & ₹1000, which is 86.4% of the total currency in circulation ceased to be legal tender due to the demonetisation. RBI denotes these demonetised notes as “Specified Bank Notes” (SBN). As per RBI Annual Report 2015-2016, as of 31/03/2016, the value of the total SBN is ₹14.18 lakh crores. Volume wise it consists of 15707 million ₹500 notes and 6326 million ₹1000 notes, ie, a total of 22033 million notes. Meanwhile, the total currency in circulationvalue wise increased to ₹17.975 Lakh crores (4/11/2016) from ₹16.415 lakh crores (31/03/2016).

Exact information of the amount of SBN as on 8/11/16 is now in public domain, thanks to a question-answer in the Rajya Sabha, which shows 17165 million pieces of ₹500 (₹8.582 lakh crores)and 6858 million pieces of ₹1000 (₹6.858 lakh crores) in circulation (Total Value: ₹15.44 lakh crores Total Volume:24023 million pieces) [So my assumptions in my earlier post of value of ₹15.5 lakh crores and volume of 24000 million is almost in the target]. To print and replace 24023 million (24.023 billion) notes is an enormous challenge considering this sheer volume of notes to be printed and capacity of our printing presses.

Capacity of Printing Presses

How can RBI achieve this target with resources at their disposal?

How much time RBI will take for to print and replace SBN with new notes?

To understand this, in a pure resources management perspective, we have to examine the output capacity of our currency note printing presses. We have two currency printing presses under Security Printing and Minting Corporation of India Limited (SPMCIL), one at Nashik in Maharastra and the other one in Dewas in Madhya Pradesh. Nashik Press was established in 1928 and Dewas was in 1974. Also two more modern currency printing press were added later to augment the printing capacity, one in Mysore in Karnataka and the other at Salboni in West Bengal under the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), which were established by Reserve Bank of India (RBI) in 1996.

First look at the capacities of Nashik & Dewas presses under SPMCIL. I have relied the Annual Report of the SPMCIL as well as a presentation available on the internet by the Currency Management Wing of the RBI. From the above records, it is inferred that Nashik Press capacity is 5800 million notes per year and Dewas capacity is 2620 million pieces.

Meanwhile, BRBNMPL’s Mysore & Salboni together can print 16000 million notes in 2 shifts in a year. See the screenshot of BRBNMPL website. So all these four presses can together print 24420 million currency notes in a year and this is closer to the supply RBI getting for last 3 years too.

So all four presses together having a printing capacity of 66.90 million/day. If we take Mysuru and Salboni alone, this will be 43.84 million/day.

Please note that latter in this discussion, it is using billion instead of million as the volume unit since I made references to the statement given by RBI in billions.

For your understanding please note that:

1 billion = 1000 million = 100 crores

Printing aborad is out of question

My next exercise was to understand whether we can outsource this currency printing to any high quality security presses abroad. That research lead me to the Report of Committee on Public Undertakings (2012-13) which deliberates “outsourcing of printing of currency notes” as recommendation serial no.14. Selected extract from the above report is reproduced here:

“The Committee also find it pertinent to point out that during printing of currency notes worth 1 lakh crores in three different countries, there was always a grave risk of unauthorized printing of excess currency notes, which would have been unaccounted money. The Committee simply wonder how come a decision was taken to have the currency notes printed by above mentioned companies in three different countries. Logically speaking since all the said three countries are well developed, each country certainly had the capability of undertaking the entire printing assignment. In any case the very thought of India’s currency being printed in three different countries is alarming to say the least. During that particular fateful period our entire economic sovereignty was at stake.

The Committee is concerned of the grave implications of such a move as it has wider ramifications in a multi faceted angle. The danger of destabilizing the economy by the agencies of authorities who could have misused our security parameters vis-à-vis printing of currency notes, the use of such notes which could have been printed in excess could easily have fallen in the hands of unscrupulous elements such as terrorists, extremists and other economic offenders, looms large in our minds. The Committee expresses its strong resentment over such an unprecedented, unconventional and uncalled for measure. The Committee while recommending that SPMCIL be strengthened to undertake the printing and minting of the required currency notes/coins fervently emphasise that outsourcing of printing of currency notes/minting coins should never be resorted to in the future.”

Reply of the Government

Since corporatisation, SPMCIL and BRBNMPL have been meeting the requirement of coins and currency and no import has been resorted to. The concerns and recommendations of the Committee have been carefully noted for future guidance.

[Ministry of Finance, Department of Economic Affairs]

( O.M. No.3/8/09-SPMC dated 3rd January, 2013 )”

So this assurance rules out the very question of outsourcing of the currency printing abroad. I don’t think RBI will violate an assurance given to the Committee of Public Undertakings of the Parliament. Hence RBI has to depend on the four presses in our country to meet this enormous demand.

Comparison with demonetisation done in 1977-78

In this context, we have to note that during the demonetisation exercise in 1977-78 only less than 5% of the high value notes were demonetised. It is also important to note that ₹100 note, which was 50.1% of the total currency in circulation was not demonetised during 1977-78. Contrary to the above, this time RBI and Government decided to demonetise ₹500 note, which consists of 47.8% of the value of the total currency in circulation. They also demonetised ₹1000 notes in circulation, thus made 86.4% of value of total currency in circulation redundant, which choked and paralysed the entire cash based economy with a whimsical direction overnight!

₹2000 note – a short shrift solution

Now look at the ₹1000 notes, volume wise its quantity is 6858 million notes. If convert the entire ₹1000 notes to ₹2000 notes, keeping the same value, then the volume will be halved to 3429 million notes to facilitate quick printing and disposal. But there is a catch, RBI has to tweak the ratio between ₹500 and ₹2000 to provide easy change and mobility between these two notes. So obviously, there should be less volume of ₹2000 notes and more volume of ₹500 notes is mandated to keep the equilibrium of the system. For the time being, let us assume that RBI has gone with a complete swap of ₹1000 with ₹2000 notes totally discarding the mobility in the system.Definitely this is a short shrift exercise without considering the much needed mobility and velocity of the demand of thes various denominations of the currency notes in circulation. In that scenario too, RBI has to print at least 20594 million notes (17615 million ₹500 &+ 3429 million ₹2000) in a short span of time.

Higher denominations will aid hoarding – RBI Study

The elimination of ₹1000 note and introduction of ₹2000 note is really perplexing and the RBI’s explanation made themselves a joke. In this context, invite your attention to RBI Study No. 39 “Modelling Currency Demand in India: An Empirical Study” to see how RBI and Government of India all along resisted to issue high denomination notes even when warranted in a short time to meet the inflation to control, considering the chances of this high denomination currency will be used for hoarding purpose by the black money holders.

The irony is now a high value currency note of ₹2000 is introduced in the guise of controlling hoarding of the very black money, but at the end of the day help the hoarders in transporting and hoarding! This haste and irrational decision was taken without considering the statistical principles of distribution of various denominations in the currency in circulation and also fully side lining the prudent decision to eliminate the chances of hoarding. This short shrift route of going for ₹2000 by RBI without considering any of the above consequences into account and only taking the ease of printing, is a telling reflection of how an Institution like RBI let itself to erode its independent stature to please the political masters!

Printing target – An estimation

I discarded here the essential tweak required for maintain the equilibrium between ₹500 and ₹2000 notes and also the increase of currency required to meet the demand of cash in the economy in the coming months till this disaster is mitigated. Many of Government sympathisers may definitely point that the entire ₹15.44 lakh crores of SBN will not return into the system and there is no need to replace the entire currency. My opinion is that these two factors balance and neutralise each other. Hence for the time being, I decide to go ahead with the figure of 20594 million new notes as our target for printing.

In the initial days, the WhatsApp army were busy in forwarding daring claims that only 50% of the SBN will return into the system. Even our Attorney General told to the Supreme Court that RBI & Government expects only a maximum of ₹12 lakh crores of SBN will be return to the system. Today we are hearing from the media quoting Ministry of Finance sources that around ₹14 lakh crores worth SBN is already returned to the system. Remember that we are still 13 more days away from the date set by Government to deposit the SBN at banks. So its time for RBI & Government to eat the humble pie. It is important to understand that the above cut-off date will not set free RBI’s responsibility to exchange the rest of the currency in circulation at their counters, it only limits the option of depositing/exchanging at banks. That is a detailed matter as it entangled in legal provisions and other issues and hence will be discussed in a future post.

Demonetisation Planning – Rajan or Patel?

To understand the currency printing schedule, first see the letter of transmittal dated 29thAugust 2016 of the RBI Annual Report 2015-16 signed by Former Governor Raghuram G. Rajan. Kindly note the above date, it is very important. We know that the present Governor Urjit R. Patel assumed office on 4th September 2016.

Now look at the same Annual Report again. Look at Table VIII.4, “Indent and Supply of Bank Notes by BRBNMPL & SPMCIL”. Look at the indent for the year 2016-17, RBI has given an indent for 5725 million ₹500 notes & 2200 million ₹1000 notes along with other lower denomination currency notes. If there was a plan in advance to demonetise these denominations, then why did RBI print and disburse such large quantities of SBN in to circulation? This is nothing but sheer wastage of exchequer’s money.

Moreover, if RBI had such an advance plan to replace the above SBN, they should have devoted their time and energy to print lower denominations notes instead of SBN. Hence it is beyond doubt that the entire demonetisation plan was come into picture after Urjit Patel taken charge. The new denomination note of ₹2000 bear the signature of the new Governor Patel, not of Governor Rajan, which also another explicit evidence to prove that these notes were introduced after Governor Rajan left RBI.

When new currency printing started?

So what is the possible date of starting the new currency printing, yes, after this so called meticulous planning, selling an amazing idea and getting a nod from high echelons to go ahead with the ‘surgical strike’? Many theories are floating in the air about this meticulous planning in the initial days by a certain section of cheerleader media and court jester journalists. I am not ready to buy any of those theories. We learnt from media reports that the printing of the new notes were confined to RBI’sBRBNMPLpresses at Mysuru & Salboni. Neither Nashik nor Dewas of SPMCIL were on the loop, may be due to the secrecy of the mission involved. Another reason may be both these presses were already assigned with printing of the lower denomination notes (from₹100 downward), which is already intended in huge quantities by the annual indent of RBI for FY 2016-17.

Considering all these constraints, let me put a rational date before you considering the resources planning angle. RBI disclosed that they have 2473.2 million ₹2000 in stock for disposal as of 8/11/2016 in response to a RTI query. With the printing capacity of 43.84 million/month of Mysore & Salboni together in 2 shifts, it will take 57 days to print the 2473.2 million notes, that means it started on 12th September 2016. Take another possibility, that RBI took an effort to enhance printing to 3 shifts from 2 shifts, then they can print 65.76 million/month, ie, means it will took 38 days, that means printing started on 1st October 2016 only.

I was really shocked to find that there was not a single ₹500 note was with RBI when they unleashed this demon over the nation! That means RBI unleashed demonetisation with just 32% of the total SBN in circulation, that too a less mobile ₹2000 note stock! They themselves will be aware that within the 50 days window period, they can’t print the rest of the SBN too!

Disbursal of Currency

Then, I look for patterns of disbursal of currency at various dates, which was inferred from the data provided through the press releases by RBI. Look at the table below:

We can see that there was a substantial increase of disbursal of currency between 27/11/06 and 05/12/16 from ₹12589 crores/day to ₹20548 crores/day, this is definitely due to the disbursement of salaries on the first of December. Thereafter, the disbursal drying up substantially in the succeeding period to ₹16000 crores/day. If we take the entire 31 days of demonetisation, the average daily release from 10/11/2016 to 10/12/2016 is ₹14871 crores/day. If the money is disbursed in the above daily average rate, between next 20 days a further ₹2,97,420 crores can be disbursed. Hence Government may be able to disburse a total of ₹7,58,420 crores or a maximum of ₹8,00,000 crores by 30/12/2016. That means just 52% of the total SBN going to be disbursed to us. But even this quantity is doubtful with the present printing woes, which is going to be examined in the subsequent paragraphs.

There is some serious cash delivery issue in the system due to inferior planning and poor judgement from the part of RBI as well as Finance Ministry. Otherwise what is the justification of various new restrictions unleashed day to day basis by RBI without respecting the notification dated 8/11/2016? It is quite depressing to see that even the address to the nation by the Prime Minister is not honoured!

RBI deleting information – why?

While looking for these data, I met with a really shocking finding. RBI published a transcript of the statement given by R. Gandhi, Deputy Governor on 07/12/2016 at its webstie under the title “press releases”. But later it is seen as purged from the RBI website! Meantime, the video of the press conference is still available in the internet (https://www.youtube.com/watch?v=IuSzeRX31ms). This really made me curious. What information was there in the above transcript, which forced RBI to delete it from the website, even sacrificing the very institutional credibility? What is there to hide from the public which was not there in the full video coverage of 5th bi-monthly monetary policy press conference 2016-17? Interestingly the RBI which deleted the transcript of R. Gandhi forget to wipe out that from the cache, so one of my friend in twitter grabbed the information from there and shared with me. See that transcript of R. Gandhi here!

It is quite an irony that the very RBI, which now exhorting us to go cashless by embracing digital mode of payment, did not even know the primary lessons of digital literacy of how to purge a document from their system! Look at the highlighted information – this is not available in the video but provided in the transcript, which RBI deleted. What is the relevance of this information? It cna lead you to the printing volume of new notes disbursed by RBI as of 10/12/2016, which they refuse to divulge so far.

Disbursal of currency denomination wise

Look at the total value of the lower denomination notes of 19.1 million disbursed by RBI from the above. It comes only to ₹1.059 lakh crores! That means the higher denominations notes are ₹3.81 lakh crores minus ₹1.059 lakh crores = ₹2.75 lakh crores. As RBI has not given the volume of high denomination notes, I was not able to decipher the possible numbers of them.

But in the next press conference on 13/12/2016, RBI provided the numbers to decipher the new currency notes in the system. Look at the statement of R. Gandhi, Dy Governor.

Here Gandhi claimed that 19.1 billion notes of lower denomination on 5/12/16 was increased to 20.1 billion on 10/12/16 meanwhile claimed that RBI disbursed 1.7 billion higher denomination notes of ₹2000 & ₹500 notes. As the amount of the total cash disbursed is ₹4.61 lakh crores, it turned out to be a simple mathematical problem to solve. There is a limit for the lower denominations to fluctuate, as we know the denomination wise quantity of 19.1 billion notes in circulation. Then if 19.1 billion lower denominations increased to 20.1 billion notes, two borderline scenarios emerges:

If the entire 1 billion volume increase are of ₹100 notes, then total value will be increased by ₹1.159 lakh crores

if the entire 1 billion volume increase are of ₹10 notes, then total value will be increased by ₹1.069 lakh crores.

That simply means that the value of higher denominations notes will be in a range of ₹3451 crores to ₹3541 crores.

This means if the entire higher denomination notes are of ₹2000 and its volume will fluctuate between 1.7 billion to 1.8 billion.

If Gandhi would not have given the exact volume wise distribution of each lower denominations in that 07/12/2016 in the transcript, we will not be able to emulate these scenarios. My strong feeling is that it is the very reason why RBI later deleted the said transcript from its website.

You can’t introduce more than a couple of million ₹500 notes into this equation, in that case the volume of higher denomination notes will go up from the 1.7 billion! Even after a month after unleashing the demonetisation on our heads RBI was not able to disburse any substantial quantity of ₹500 notes in the circulation, which are the most essential denomination for the reasons I cited in my previous blog post. That is why we are not seeing these notes in the market and feel the burn of cash crunch so badly. Its shame on RBI to flash a couple of million notes of this ₹500 notes in metro cities and major urban centres for a limited purpose of optics management before the 24×7 electronics media and to flaunt in WhatsApp forwards & re-tweets on social media! It is really sad to see that a reputed professional organisation like RBI is letting down the nation with these type of cheap tricks of optics management rather meeting the pressing demands!

Lower denomination disbursal – a record??

Gandhi told on 7/12/2016 press conference that RBI has provided 19.1 billion lower denomination notes after demonetisation, which is a record as it is more than what reserve bank provided in last 3 years to the system. If we look at indent & supply for last FY year, from the above table, we can see that around 16 billion lower denomination notes were printed then. This FY year also RBI given an indent to print 16.6 billion lower denomination notes and if the presses print according to their capacity, there will be new 12.5 billion notes till 10/12/2016. Along with this quantity, there will be soiled notes which are being collected to dispose during this FY(Kindly note that, last year alone around 13 billion lower denomination soiled notes were disposed off), which are also pushed back to circulation as we see lots of old soiled notes back. Also note that the total number of lower denomination notes in circulation as on 31/03/2016 was 56.6 billion. It is interesting to note that Gandhi never claimed RBI has printed 19.1 billion notes, instead he only made a tall claim that these notes were a record volume! Media never asked any questions to him and Gandhi barked in glory! I am sorry to say that I can’t digest this all-time record claim of attention diversion by twisting the facts!

Where is that ₹500 note?

Let us come back to the figure of 1.7 billion high denomination notes disbursed by 10/12/2016. This information is quite perplexing when we compare the printing press capacities. We have seen that RBI had a stock of 2.473 billion ₹2000 notes as on 8/11/2016 itself. So if these printing presses working at least 2 shifts/day, there would have been another 1.4 billion pieces of ₹2000 & ₹500 with RBI by 10/12/2016 (32 days x 43.84 = 1403 million). To completely replace, the ₹1000 notes by ₹2000 notes, RBI needed to print 3.429 – 2.473 = 0.956 billion pieces. So RBI should have by 10/12/2016 printed the entire ₹2000 notes to replace the ₹1000 notes. I hope and pray that RBI did not go ahead with another short shrift solution of printing more ₹2000 notes to replace ₹500 notes after done with ₹1000 notes, which will completely disrupt the mobility and balance of the currency in circulation. Why RBI holding the rest 1.729 billion of ₹2000 notes (3.429-1.7=1.729) without disbursing to public?

Also from the above we can find that a quantity of 0.444 billion ₹500 notes (1.4-0.956=0.444) printed after are with RBI, but a few millions are only disbursed to public. It is really perplexing that why RBI is not distributing these ₹500 notes in substantial quantities? This is quite baffling because RBI through its press releases informed that they disbursed ₹500 notes with the following series numbers:

·without inset

·with E as inset

·with L as inset,

·E and star as inset and

·with R as inset.

This indicates that various printing presses are put to the task of printing the ₹500 notes, but as we are not seeing much of ₹500 notes in circulation, it is feared that some issues crop up during its printing. Recollect the media reports of two different design ₹500 notes crop up and RBI’s bizarre explanation. RBI informed that up to 10/12/16, they have disbursed 1.7 billion high denomination notes. This will definitely be 1.7 billion ₹2000 notes and a few million ₹500 notes, as I shown above. Also relying above printing calculations & RTI disclosure, we can very well conclude that RBI may have a stock of at least 1.7429 billion ₹2000 notes and 0.444 billion ₹500 notes as of 10/12/2016.

In the above context, let me put some questions to RBI:

Why you are not disbursing sufficient ₹500 notes to circulation to ease the mobility crisis?

Why you are not disbursing enough ₹2000 notes and imposing unreasonable restrictions on withdrawal for our money deposited in banks?

Inform us whether the above stock of notes is having any relation with the hoarding of huge quantity of currency notes seized from various parts of the country?

Exact quantity of ₹2000 notes and ₹500 notes printed and disbursed so far

Or your printing systems faced any unexpected failure & you are struck?

Exact schedule and output of printing of various denomination of notes at various presses under RBI and SPMCIL

When we will get back our currency?

Now we have to consider when we will get back the ₹500 notes demonetised from the system back. As we seen from above that 0.444 billion ₹500 notes would have been printed up to 10/12/16, then how much time RBI will take to print remaining 16.721 billion pieces (17.165-0.444=16.721).

In this context, I am giving you three possible scenarios considering the printing capacity of our four currency printing presses. I have not considered certain constraints here, like additional skilled manpower needed to introduce a 3rd shift for a prolonged period, raw material supply constraints, machinery maintenance, forced plus routine shutdowns and other surprises which can crop up anytime. Then I have not considered additional output (?) possible with the reduced size of new notes too as someone argues. I gone ahead with a perfect printing mechanism with sufficient manpower and resources at disposal. So take this estimation and earliest possible dates with a pinch of salt.

First Scenario

Mysuru & Salboni (3 shifts/day) AND Nashik & Dewas

@88.82 million/day needs 188 days – 16thJune 2017

Second Scenario

Mysuru & Salboni (3 shifts/day) AND Nashik

@ 81.64 million/day needs 204 days – 2nd July 2017

Third Scenario

Mysuru, Salboni (2 shifts/day) & Nashik

@ 59.73 million/day needs 280 days – 16thSeptember 2017

These are the earliest possible dates to replace SBN with new currency in a pure resources management angle.

Looking at the above earliest dates will make anyone shudder, I don’t know when the normalcy of the system can be restored! Remember, our Prime Minister on 8/11/2016 sought us a couple of days to restore the normalcy This will give you an idea about the planning prowess of the mandarins in RBI and Finance Ministry. Ask ourselves whether we have fallen into a rabbit hole? We Indians still believe in magic and we bear all subjugation as our bad karma or destiny. But here no magic wand is left to create miracles, we are destined to silently suffer this onslaught for half a dozen months too.

Estimation of possible return of SBN

Now look at the way SBN is coming back to the banks. This table extracts information from various press conferences.

This table will explain you why Government & RBI are getting panic and imposing new restrictions like deposits up to ₹5000 to non-KYC accounts and questioning people depositing more than ₹5000 into their KYC accounts. Why we are treated like criminals? Under which legal or constitutional provision Government and RBI arbitrarily gives this police power to the bank authorities to abuse us?

This is becoming a theatre of absurd when the very Government, who is reluctant to reveal to public the names of celebrities and big shots who keep thousands of crores of black money abroad arm twisting the common man and honest tax payers!. Tell us what is the crime committed by us? Are you intimidating and insulting us for believing the Prime Ministers address to the nation on 8/11/2016??

Look at various possibilities on 30/12/2016 (20 days from 10/12/2016)

With an average daily inflow of ₹15000 crores, entire SBN valued ₹15.44 lakh crores will return to banks

With an average daily inflow of ₹12800 crores, total SBN valued ₹15 lakh crores will return to banks

With an average daily inflow of ₹10300 crores, total SBN valued ₹14.5 lakh crores will return to banks

My strong belief is that SBN valued around ₹15 lakh crores will most probably return to the system, rest of the SBN will be trapped in Nepal & Bhutan and other countries for the time being. If ₹15 lakh crores of SBN return, then it will totally shatter and tear away all mighty claims by the Government and RBI that a maximum of ₹11 lakh crores to ₹12 lakh crores of SBN will only return to banks.

Then the entire demonetisation hungama will fall apart as a monumental disaster, yep, its now just a matter of time.. Now the deadline set by our Prime Minister in his 08/11/2016 speech has already expired.

The above presentation is the hard work of Mr.James Wilson Member of the Mullaperiyar Special Cell, Government of Kerala. A civil engineer by profession. Associated with construction & management of various hydro electric projects & thermal power projects of KSEB Ltd between 1994-2001. Since 2001, shfited to water resources management & inter state water disputes with special emphasis on the techno-legal aspects. Now working in a consultant role to provide the techno-legal inputs on various inter state water dispute issues & water policy related matters to Kerala State Government.

Chaos even after Indian Government Issued New Currency Notes of Rs 500 and Rs 2000 promising easy exchange at Banks

In a country where taxi drivers and shopkeepers are already reluctant to part with small bills, the sudden policy change have complicated the business transactions.

Much of the government’s new initiative remains mired in confusion. It is not clear exactly what will be the effect on the money supply or whether it will take out a lot of cash in circulation.

In a statement issued today, the Reserve Bank of India has said that consequent to the withdrawal of Legal Tender Character of existing ₹ 500 and ₹ 1000 Bank Notes, it has made arrangements to distribute the notes in new ₹ 2000 and other denominations across the country.

RBI claimed “There is enough cash available with banks and all arrangements have been made to reach the currency notes all over the country”. Bank branches have already started exchanging notes since November 10, 2016.

Still through out India long lines of people could be seen outside bank branches as people queued up to exchange the now-invalidated currency notes of Rs 500 and Rs 1,000. In additions many cities across India, banks were scrambling for the new notes leading to longer lines.

Above all unexpected formalities kept the queues frozen for a while.

Many customers complained of not being informed about technicalities involved before arriving at the bank. “Now they are telling us that money has to be deposited or exchanged only at home branches. We were not even informed that we had to get self-attested photocopies of our identity proof.

“This is a financial chaos and disaster let loose on the common people of India,” Mamata Banerjee, West Bengal chief minister tweeted.

Uddhav Thackeray, the Shiv Sena supremo said “This is not the way to do things. You can’t beat someone to death and convince him that it is being done for his own benefit,”

Thackeray demanded that if banks were running out of cash then the government should make everything free including medical care, hospitalisation, purchase of groceries and daily need utilities free of cost till banks replenish their cash reserves.

RBI mentioned , it may take a while for the banks to recalibrate their ATMs; once the ATMs are functional, members of public will be able to withdraw from ATMs upto a maximum of ₹ 2,000 per card per day up to November 18, 2016; and after that withdraw up to ₹4000 per day per card. Several ATMs have started functioning from this morning as the banks could complete recalibration of these machines to allow withdrawals up to ₹ 2000 to begin with.

RBI gets the notes from four presses. The Security Printing and Minting Corporation of India (SPMCIL) has presses at Nashik in Maharashtra and Dewas in Madhya Pradesh. The other two are owned by RBI, through a subsidiary, Bharatiya Reserve Bank Note Mudran (BRBNML), at Mysuru, Karnataka, and Salboni in Bengal.

A shortage of new denomination notes of Rs 500 and Rs 2,000 as being witnessed in various bank branches.

The facility for exchanging the withdrawn denominations of ₹ 500 and ₹ 1000 is available for nearly 50 days. The Reserve Bank appeals to members of public to be patient and urges them to exchange their old notes at their convenience, any time before December 30, 2016.

Applicants are getting a ‘request slip’ which clearly mentions that Aadhar card, pan card, driving license, passport, or voter ID card will serve the purpose of an official proof.

Request Slip

FAQ

The Reserve Bank appeals to members of public to be patient and urges them to exchange their old notes at their convenience, any time before December 30, 2016.

FAQs on Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of ₹ 500/- and ₹ 1000/-

(Updated as on November 11, 2016)

1. Why is this scheme introduced?

The incidence of fake Indian currency notes in higher denomination has increased. For ordinary persons, the fake notes look similar to genuine notes, even though no security feature has been copied. The fake notes are used for antinational and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money. India remains a cash based economy hence the circulation of Fake Indian Currency Notes continues to be a menace. In order to contain the rising incidence of fake notes and black money, the scheme to withdraw has been introduced.

2. What is this scheme?

The legal tender character of the existing bank notes in denominations of ₹500 and ₹1000 issued by the Reserve bank of India till November 8, 2016 (hereinafter referred to as Specified Bank Notes) stands withdrawn. In consequence thereof these Bank Notes cannot be used for transacting business and/or store of value for future usage. The Specified Bank Notes can be exchanged for value at any of the 19 offices of the Reserve Bank of India or at any of the bank branches of commercial banks/ Regional Rural Banks/ Co-operative banks or at any Head Post Office or Sub-Post Office.

3. Does the scheme apply to pre 2005 banknotes of ₹500 and ₹1000?

Yes the specified banknotes include pre 2005 banknotes in the denominations of ₹500 and ₹1000.

4. How much value will I get?

You will get value for the entire volume of notes tendered at the bank branches / RBI offices.

5. Can I get all in cash?

No. You will get upto ₹4000 per person in cash exchange irrespective of the size of tender and anything over and above that will be receivable by way of credit to bank account.

6. Why I cannot get the entire amount in cash when I have surrendered everything in cash?

The Scheme does not provide for it, given its objectives.

7. ₹4000 cash is insufficient for my need. What to do?

You can use balances in bank accounts to pay for other requirements by cheque or through electronic means of payments such as Internet banking, mobile wallets, IMPS, credit/debit cards etc.

8. What if I don’t have any bank account?

You can always open a bank account by approaching a bank branch with necessary documents required for fulfilling the KYC requirements.

9. What if, if I have only JDY account?

A JDY account holder can avail the exchange facility subject to the caps and other laid down limits in accord with norms and procedures.

10. Where can I go to exchange the notes?

The exchange facility is available at all Issue Offices of RBI and branches of commercial banks/RRBS/ Co-operative banks or at any Head Post Office or Sub-Post Office.

11. Need I go to my bank branch only?

For exchange upto 4000 in cash you may go to any bank branch with valid identity proof.

For exchange over 4000, which will be accorded through credit to Bank account only, you may go to the branch where you have an account or to any other branch of the same bank.

In case you want to go to a branch of any other bank where you are not maintaining an account, you will have to furnish valid identity proof and bank account details required for electronic fund transfer to your account.

12. Can I go to any branch of my bank?

Yes you can go to any branch of your bank.

13. Can I go to any branch of any other bank?

Yes, you can go to any branch of any other bank. In that case you have to furnish valid identity proof for exchange in cash; both valid identity proof and bank account details will be required for electronic fund transfer in case the amount to be exchanged exceeds ₹4000.

14. I have no account but my relative / friend has an account, can I get my notes exchanged into that account?

Yes, you can do that if the account holder relative/friend etc. gives you permission in writing. While exchanging, you should provide to the bank, evidence of permission given by the account holder and your valid identity proof.

15. Should I go to bank personally or can I send the notes through my representative?

Personal visit to the branch is preferable. In case it is not possible for you to visit the branch you may send your representative with an express mandate i.e. a written authorisation. The representative should produce authority letter and his / her valid identity proof while tendering the notes.

16. Can I withdraw from ATM?

It may take a while for the banks to recalibrate their ATMs. Once the ATMs are functional, you can withdraw from ATMs upto a maximum of ₹2,000/- per card per day upto 18th November, 2016. The limit will be raised to ₹4000/- per day per card from 19th November 2016 onwards.

17. Does the limit of ₹ 10,000 withdrawal apply to withdrawals from bank account of one bank from another bank?

These limits are not applicable to cash withdrawal from a bank account by one bank from another bank, Post Office, Money changers operating at International airports and operators of White Label ATMs. The branches maintaining Currency Chests have been advised to accommodate the requests from other branches in their vicinity – linked or otherwise – for supply of cash.

18. Can I withdraw cash against cheque?

Yes, you can withdraw cash against withdrawal slip or cheque subject to ceiling of ₹10,000/- in a day within an overall limit of ₹20,000/- in a week (including withdrawals from ATMs) upto 24th November 2016, after which these limits shall be reviewed.

20. Can I make use of electronic (NEFT/RTGS /IMPS/ Internet Banking / Mobile banking etc.) mode?

You can use NEFT/RTGS/IMPS/Internet Banking/Mobile Banking or any other electronic/ non-cash mode of payment.

21. How much time do I have to exchange the notes?

The scheme closes on 30th December 2016. The Specified banknotes can be exchanged at branches of commercial banks, Regional Rural Banks, Urban Cooperative banks, State Cooperative Banks and RBI till 30th December 2016.

For those who are unable to exchange their Specified Bank Notes on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI, along with necessary documentation as may be specified by the Reserve Bank of India.

22. I am right now not in India, what should I do?

If you have Specified banknotes in India, you may authorise in writing enabling another person in India to deposit the notes into your bank account. The person so authorised has to come to the bank branch with the Specified banknotes, the authority letter given by you and a valid identity proof (Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff)

23. I am an NRI and hold NRO account, can the exchange value be deposited in my account?

Yes, you can deposit the Specified banknotes to your NRO account.

24. I am a foreign tourist, I have these notes. What should I do?

You can purchase foreign exchange equivalent to ₹5000 using these Specified Bank Notes at airport exchange counters within 72 hours after the notification, provided you present proof of purchasing the Specified Bank Notes.

25. I have emergency needs of cash (hospitalisation, travel, life saving medicines) then what I should do?

Till the 11th November, 2016, specified banknotes can be used as under:—

(a) for making payments in Government hospitals for medical treatment and pharmacies in Government hospitals for buying medicines with doctor’s prescription;

(b) at railway ticketing counters, ticket counters of Government or Public Sector Undertakings buses and airline ticketing counters at airports for purchase of tickets;

(c) for purchases at consumer cooperative stores operated under authorisation of Central or State Governments;

(d) for purchase at milk booths operating under authorisation of the Central or State Governments;

(e) for purchase of petrol, diesel and gas at the stations operating under the authorisation of Public Sector Oil Marketing Companies;

(f) for payments at crematoria and burial grounds;

(g) at international airports, for arriving and departing passengers, who possess specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character;

(h) for foreign tourists to exchange foreign currency or specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character.

(i) for making payments in all pharmacies on production of doctor’s prescription and proof of identity;

(j) for making payments on all toll plazas on the State and National Highways;

(k) for payments on purchases LPG gas cylinders;

(l) for making payments to catering services on board, during travel by rail;

(m) for making payments for purchasing tickets for travel by suburban and metro rail services;

(n) for making payments for purchase of entry tickets for any monument maintained by the Archeological Survey of India.

26. Can I use the Specified banknotes to settle outstanding in my loan account?

Deposits of Specified bank Notes into all types of deposit/loan accounts is allowed subject to CTR/STR reporting.

Indian Government Issued New Currency Notes of Rs 500 and Rs 2000

The average age of the notes are usually less than a year but depend on usage.
Lower the value, higher the usage

Stone grey coloured Rs. 500 currency notes and magenta coloured Rs. 2,000 currency notes are put into circulation by the Reserve Bank of India following the Demonetization of Rs. 500 and Rs. 1,000 currency notes from the midnight of 9th Nov 2016.

The predominant new theme of the Rs. 500 note is the heritage site of Red Fort.

The RBI said it has introduced the new design banknotes of Rs. 2,000 denomination as part of Mahatma Gandhi (new) series. It has motif of ‘Mangalyan’ (ISRO’s Mars mission) on the reverse, depicting the country’s first venture in interplanetary space.

THE GIST

Now We are living in a world of shifting sides, of terrorism enacted by shadowy entities and populations indirectly under arrest by the system and power, of mass restriction of information, freedom, movement, natural resources and, importantly, technology — technology that would remove the need to fight over resources.

today, the endless (unwinnable) War On Terror and numerous false flag attacks have proven to be effective (albeit transparent) ways to drive both corporate profits and tighter legislative controls of the citizen's, literally taking control of the collective consciousness of humanity.

One of the best ways to gain and maintain power over people and support for doing anything is to keep the people in constant fear — in fear of wars, of outsiders, and more recently, of “terrorism”.

If you want to understand how major world events in the past have happened and happening in your nation are by design and not by mistake keep your seats reserved at Arrested Developments.

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Painting: Ramesh Patel, source: www.artzolo.com

DABANGG: means “Courageous and Daring”

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